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For those who have followed the saga of the congressional-Republican effort to implement Donald Trump’s second-term legislative agenda via a giant budget-reconciliation bill that has been in the works since well before Inauguration Day, crunch time has arrived. House Speaker Mike Johnson has set Memorial Day as the deadline for getting a bill through the House. The harder deadline for final passage is mid-July; that’s the expected “X-date,” when the U.S. Treasury will need a debt-limit fix, which will be in the bill. The process has dragged on longer than many Republicans had hoped owing to a variety of factors, including both House-Senate differences on procedure and substance and GOP factional differences (exacerbated by White House equivocation on many key points) on the size and shape of tax cuts and the depth of offsetting domestic-spending cuts, among other items.
In other words, even though the president’s party controls the process entirely, and virtually all congressional Republicans have bent the knee to the 47th president (at least publicly), this has been far from a smooth ride. But the operating assumption in Washington has been that once the bill comes to a vote, everyone will fall into line and give Trump his win.
This week, The American Prospect’s David Dayen, who knows his stuff on reconciliation, raised the possibility that the whole effort could collapse. His article methodically goes through the flash-point issues and how they interact. One of the most intractable is the effort to raise the cap on SALT (state and local tax) deductions imposed in 2017, which doesn’t matter much to most Republicans (aside from a general conservative hostility to the idea of “subsidizing high state taxes”) but is existential to a large enough group of blue-state House Republicans to potentially sink the whole bill:
This fight is years in the making, and both sides are dug in. These few members are enough to sink the bill, and they have expressed an eagerness to do absolutely that if they don’t get what they want. Rep. Nick LaLota (R-NY) has told reporters, “I am willing to stake my entire congressional career” on whether his upper-middle-class New York constituents can deduct more from their taxes.
As it happens, the SALT caucus overlaps significantly with House Republicans in vulnerable districts who are freaked out by deep domestic-program cuts, particularly those affecting Medicaid, the largest and most important source of budget “savings” needed to pay for tax cuts. But giving the SALT/moderate gang what it wants could mess up the arithmetic of the entire package while infuriating the House Freedom Caucus deficit hawks who are demanding deep Medicaid and food-stamp cuts and an overall net-deficit-reduction score for the bill. The HFC folk, while professing loyalty to Trump, have proven they are willing to fall on their swords for their ideological demands (blaming everyone other than Trump, of course, for the provisions they find objectionable).
And even if the big beautiful bill gets through the House, there will be additional problems in the Senate. That’s particularly true if the Republican gambit in that chamber of pretending that a permanent extension of the 2017 Trump tax cuts has no impact on the deficit is sidetracked by an adverse ruling from the Senate parliamentarian, which is entirely possible. But even if that doesn’t happen, several Republican senators are objecting to the Medicaid cuts the House is likely to approve, and another (Ron Johnson) is calling on Republicans to stop the process and start all over.
Meanwhile, as Dayen points out, there are multiple signs that there are limits to Trump’s ability to dictate terms to his congressional vassals when it comes to issues where business lobbyists differ with the administration:
[The House package originally] included a White House proposal for “most favored nation” status for prescription drugs, a measure Trump tried by executive order in his first term that would attempt to limit drug purchases in Medicare to the price other countries pay.
But suddenly, Trump declared that he would announce the most favored nation initiative today, by executive order. As Bill Scher says correctly, this is a sign of weakness, that he couldn’t get the idea past Republicans in Congress and the phalanx of drug company lobbyists who surround the Capitol. Republican congressional opposition takes away one of the few budget-reducing measures that is actually popular, by dropping the cost of prescription drugs.
Trump’s suggestion that the package include a symbolically potent increase in the top income tax rate for multimillionaires (though for its alleged victims, a light spanking offset by other goodies in the bill) has also apparently fallen by the wayside, even though it would have helped make the numbers add up.
Maybe it will all somehow get worked out, but as Dayen says, it might not:
The truly incredible thing now being whispered in the Capitol is that they give up on the big beautiful bill entirely, and try just to extend the Trump tax cuts in a deal with Democrats at the end of the year. To go back to something else I wrote, this one in February, that Republicans would fail to get together on tax cuts, something so simple and fundamental to their perspective, is both unthinkable yet totally predictable. This is a caucus with no legislative accomplishments or track record, with huge differences of opinion, and with an allergy to compromise.
They’re also trying to march behind a field general in Donald Trump, who is often indifferent to some key legislative details and can’t seem to make up his mind on others. After all, Republicans with bigger margins of control in Congress managed to flub their first reconciliation bill during Trump’s first term. The idea that Democrats might get dealt back into the Washington game this year by Republican divisions and incompetence would seem too good to be true for the Donkey Party, which has its own problems. But at the moment, it’s not out of the realm of possibility.
